It's time for investors who can tolerate moderate risk to get on board railroad Kansas City Southern (NYSE: KSU), and why not? The nation's inadequate, congested interstate highway system and vehicle system dependent on oil suggests a bottle-neck plagued, high-cost road transportation system in the years ahead.

Hence, I'm reiterating my Buy rating for Kansas City Southern, first recommended on July 29, 2009, at a price of $19.66. If you bought KSU in July, you're up 39%.

Analyst upgrades:

• UBS upgraded Kansas City Southern (NYSE:KSU) to Buy from Neutral and lowered its target to $26 from $35 citing valuation.
  
• Gabelli upgraded Media General (NYSE:MEG) to Hold from Sell because the firm thinks that Harbinger Capital has sold most of its shares in the company. As a result, the firm thinks the stock will be under less selling pressure.
  
• Eagle Bulk Shipping (NASDAQ:EGLE) was upgraded to Neutral from Underperform at Merrill Lynch.
• Centene (NYSE:CNC) was raised to Buy from Neutral at Goldman.
  
• Ralcorp (NYSE:RAH) was upgraded at Credit Suisse to Outperform from Neutral.
  
• Interpublic Group (NYSE:IPG) was upgraded to Equal Weight from Underweight at Morgan Stanley.

Analyst downgrades:

• Keefe Bruyette downgraded Healthcare Realty(NYSE:HR) to Market Perform from Outperform on concerns the company's development activity could be dilutive to near-term earnings.
  
• Citigroup downgraded Satyam (NYSE:SAY) to Sell from Buy as they believe the company's acquisition plans, and subsequent cancellation of the deals, will lessen investor confidence in the name.
  
• Oppenheimer downgraded Apple (NASDAQ:AAPL) to Perform from Outperform citing Steve Jobs cancellation of his annual key note speech at Macworld on January 6. The analyst said the unexpected announcement underscores Apple's long-term dependence on Job's health and its lack of succession plan.
• Baird downgraded Carlisle NYSE:CSL)to Neutral from Outperform.
  
• Gibraltar Industries (NASDAQ:ROCK) was downgraded at Piper Jaffray to Sell from Buy.
  
• NetApp (NASDAQ:NTAP) was cut to Accumulate from Buy at ThinkPanmure.

Analyst initiations:

• Citigroup believes the acquisition of Barr enhances Teva's (NASDAQ:TEVA) growth. The firm started shares with a Buy rating and $52 target.
  
• Suntrust initiated American Express (NYSE:AXP) with a Reduce citing slowing growth and greater-than-industry deterioration in credit quality.
  
• Roth Capital initiated The Buckle (NYSE:BKE) with a Hold rating and $17 target citing the deteriorating macro environment.
• Amazon.com (NASDAQ:AMZN) and Allegheny Tech (NYSE:ATI) were assumed with Neutral ratings and targets of $52 and $26, respectively, at UBS.
  
• Digital Realty (NYSE:DLR) was initiated at Piper Jaffray with a Buy rating.
  
• Mylan (NYSE:MYL) was started with an Overweight rating and $15 target at JP Morgan.

"Having spent a lot of time recently studying the North American transportation industry, my conclusion is that trucking is on the decline while the railroads are poised to increase market share," notes Tom Slee.

The contributing editor to Gordon Pape's Internet Wealth Builder states, "The logical conclusion: buy rail stocks now." Here he looks at Kansas City Southern (NYSE: KSU) and Burlington Northern Santa Fe (NYSE: BNI).

"Who would have thought it? Railways are having a good year. They were supposed to be hunkered down, riding out the recession. Instead, the old iron horse is thriving.

"Surging demand for commodities is more than offsetting a slump in building materials shipments. Even higher energy costs are proving a plus for the railroads. Each jump in oil prices gives them a bigger edge over their gas guzzling competitors: trucks.

"Most important, the rails are able to raise rates despite the economic downturn. Their surcharges are sticking. Yet the stocks are out of favour.

TheStreet.com's Jim Cramer says lots of companies now thrive with crude up here.

Oil's not a tax on everything -- it's a tax on the consumer. That's what I come down to when I see the charts this weekend and ponder what's happening in so much of industrial America.

Company after company that I examine -- the new techs, as I call them -- actually benefit from higher oil prices. Or they can pass them on with ease, because of the worldwide demand being so strong.

Take all of the companies involved with making a Boeing (NYSE: BA) (Cramer's Take): Boeing itself, Alcoa (NYSE: AA) (Cramer's Take), Honeywell (NYSE: HON) (Cramer's Take) and Precision Castparts (NYSE: PCP) (Cramer's Take) being good examples. Each of these is necessary because the new Dreamliner burns lots less fuel, and with fuel the biggest airline cost, it stands to reason that higher energy prices make the plane more desirable even at a higher price point.

Or how about all of the companies involved with process and flow control and efficient motors: Parker-Hannifin (NYSE: PH) (Cramer's Take), Emerson (NYSE: EMR) (Cramer's Take), Eaton (NYSE: ETN) (Cramer's Take) and Flowserve (NYSE: FLS) (Cramer's Take). Those work higher with higher energy prices. CSX (NYSE: CSX) (Cramer's Take), Burlington Northern (NYSE: BNI) (Cramer's Take), Kansas City Southern (NYSE: KSU) (Cramer's Take), Union Pacific (NYSE: UNP) (Cramer's Take) and Norfolk Southern (NYSE: NSC) (Cramer's Take) are smaller energy users than trucks, and they ship plenty of ethanol and fertilizer.

MOST NOTEWORTHY: Select railroads were popular initiations today:

• Morgan Keegan started shares of Burlington Northern Santa Fe Corp (NYSE: BNI) with an Outperform rating and believes the stock should trade at a premium to Class 1 railroad peers, as the company consistently ranks above its peers in terms of operating ratio and return on invested capital.
  
• Morgan Keegan believes Kansas City Southern (NYSE: KSU) de Mexico provides KSU a tremendous growth opportunity, starting shares with an Outperform rating.
  
• Morgan Keegan also believes Norfolk Southern Corp (NYSE: NSC) is undervalued, despite having some of the best operating metrics in the industry, initiating shares with an Outperform rating.
  
• Union Pacific Corp (NYSE: UNP) was started with an Outperform rating as Morgan Keegan believes earnings estimates and management guidance may be conservative.
  
• Finally, CSX Corp (NYSE: CSX) was initiated with a Market Perform rating at Morgan Keegan as the firm believes there is more risk to the current share price than the potential upside...
  

OTHER INITIATIONS:

• Citigroup started Gaylord Entertainment Co (NYSE: GET) with a Buy rating and $68 target.
  
• Morgan Joseph initiated shares of Jakks Pacific, Inc (NASDAQ: JAKK) with a Buy rating.
  
• ITT Corp (NYSE: ITT) was given an Equal Weight rating by Morgan Stanley.
  
• Banc of America started Healthways, Inc (NASDAQ: HWAY) with a Buy rating and Matria Healthcare, Inc (NASDAQ: MATR) with a Neutral rating.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Motorola Inc (MOT), Maguire Properties Inc (MPG), China Life Insurance Co Ltd (LFC) and Palm, Inc (PALM) were some of today's most notable downgrades:

• Lehman Bros downgraded shares of Motorola Inc (NYSE: MOT) to Equal Weight from Overweight with a $20 target citing a slower recovery in handset margins.

• Stifel downgraded Maguire Properties Inc (NYSE: MPG) to Sell from Hold. Friedman Billings removed Maguire from its Top Picks list, citing the $2.9 billion acquisition of California assets for the removal.

• Bear Stearns downgraded China Life Insurance Co Ltd (NYSE: LFC) to Underperform from Peer Perform based on valuation.

• ThinkEquity cut Palm, Inc (NASDAQ: PALM) to Accumulate from Buy with an $18 target citing valuation driven by takeover speculation as well as lack of execution improvements.

OTHER DOWNGRADES:

• UBS downgraded shares of both CSX Corp (NYSE: CSX) and Kansas City Southern (NYSE: KSU) to Neutral from Buy on valuation. The broker raised CSX's target to $45 from $41 and raised Kansas City's target to $38 from $33.

• AG Edwards downgraded Qualcomm, Inc (NASDAQ: QCOM) to Hold from Buy on valuation.

• Lehman downgraded Hasbro Inc (NYSE: HAS) to Equal Weight from Overweight with a $30 target.

• Matrix USA downgraded KB Home (NYSE: KBH) to Hold from Strong Buy based on valuation.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).